Dr. Valentin Gapontsev earned a doctorate at the Moscow Institute of Physics & Technology and started what became IPG Photonics at age 52 in 1990. The company manufacturers fiber lasers that can cut, weld, mark and braze metals and other materials. While the company started in Russia, the market there was frozen, but he was able to get clients in Italy, Germany, and the U.S., ultimately locating his headquarters in Oxford.

Mr. Gapontsev and his family trust own 47.6 percent of IPG — holdings worth $1.4 billion on Nov. 23 — up 34 percent since IPG's 2006 initial public offering.

But the Worcester resident is 73 years old, and it's unclear who will take over from him when he is gone. Why did he move the company to Oxford? Should you invest in its shares?

Peter Cohan of Marlboro heads a management consulting and venture capital firm, teaches business strategy, and is the author of 11 books – most recently, “Hungry Start-up Strategy: Creating New Ventures with Limited Resources and Unlimited Vision.” His column runs Sundays and Wednesdays on telegram.com. His email address is peter@petercohan.com.

Mr. Gapontsev has overcome some big challenges in his career. He has been able to convince doubters around the world by building products that deliver better value to customers.

As he told the Boston Globe, when he started, many doubted him. “Great scientists said, 'You are crazy; it is not possible.' Now everybody thinks it is so simple, so easy; in the beginning nobody was even thinking in that direction.”

And IPG also overcame a near death experience when the dot-com bubble burst. That's because it got 86 percent of its revenues from telecom companies that supplied builders of fiber optic networks during the 1990s to handle the rapid growth in Internet traffic. Those money-losing network builders had been kept alive by borrowing, $3 trillion in total, and the bursting of the dot-com bubble meant that they stopped buying from IPG.

To IPG's credit, Mr. Gapontsev decided to bet the company on lowering its costs by vertically integrating. To understand vertical integration, it helps to think of an industry as a chain of different companies, from the most basic raw materials to the end-user. For IPG Photonics, this meant making its own electronic components, such as power diodes and optical fiber connectors, rather than buying them from distributors. This allowed IPG Photonics to reduce its costs by as much as 90 percent, giving it the option of lowering its prices or holding on to more profit.

Moreover, Mr. Gapontsev also decided to spread out the company's sources of revenue. That is, IPG was no longer so dependent on selling its products to just one industry. It began making lasers for manufacturing, cutting and welding in automobile and aircraft factories and shipyards. By 2008 telecom accounted for a mere 7 percent of revenue. IPG also sells lasers for plastic surgery. That is not a guarantee against a drop in revenue, but it does provide some comfort to IPG shareholders, compared to the risks that IPG faced when its 1990s bet on telecommunications companies blew up.

Now IPG is the market leader in an industry that is growing at 10 percent a year. The company has a 75 percent market share in the $600 million laser fiber market, according to Olga Levinzon, an analyst with Barclays Capital. And in a conference in Manhattan in early 2012, IPG Chief Financial Officer Timothy Mammen said that he expected the company to grow at a 25 percent compound annual growth rate through 2015.

The reason IPG's lasers are so popular it that they use optical fibers to generate their intense light; competing products use crystals or gases. That matters to companies that buy IPG's products because welders can control fiber lasers more precisely than competing lasers, while “still delivering enough power to weld car bodies or slice through steel plates,” according to the Globe. Not only that, but fiber lasers are as much as 30 times more efficient than competing technologies, according to IPG's financial filings.

Mr. Gapontsev – he did not respond to a request for an interview I left on his office voice mail system – appears to have moved his headquarters to Oxford partially because of a great tax deal. IPG Photonics got a 10 percent tax credit from Massachusetts and a 76 percent discount on its Oxford property tax. In exchange, IPG Photonics has created more than 600 jobs, more than double the 250 local jobs it promised by 2019 in its 1999 20-year Tax Increment Financing agreement. IPG Photonics also says it has paid $645,000 in local taxes and spent $1.4 million on local businesses, according to WBJournal.com.

Mr. Gapontsev ought to be thinking about succession planning, given his age. And according to IPG's financial statements, that job is being done by its independent directors. But are the growth prospects for IPG so strong that its stock would be a good investment, despite the risk that Mr. Gapontsev's successors may not be as skilled?

One way to address that question is to examine IPG's price-earnings to growth ratio. If the PEG is less than 1, I think a stock is a bargain. If it trades above 1, the stock is less than attractively priced.

With a PEG of 1.63, IPG is over-valued on a price-earnings ratio of 21 and earnings per share forecast to grow at 12.9 percent to $3.24 by 2013. However, it is worth considering that in its most recent quarter, IPG grew faster than expected. Its “revenues increased 21 percent and net income was up 29 percent from the prior year,” as Mr. Gaponstev explained in an Oct. 31 conference call with investors.

Mr. Gapontsev wrote in SPIE Professional that his father taught him to be strong in the face of adversity. And in managing IPG he has certainly demonstrated his ability to do that. If his successors have that same trait, investors in IPG will continue to do well and should consider whether to buy shares during market downturns.

Peter Cohan of Marlboro heads a management consulting and venture capital firm, teaches business strategy, and is the author of 11 books – most recently, “Hungry Start-up Strategy: Creating New Ventures with Limited Resources and Unlimited Vision.” His column runs Sundays and Wednesdays on telegram.com. His email address is peter@petercohan.com.

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